Skip to content Skip to navigation

Michigan Unemployment Fraud Class Action Lawsuit

image of an unemployed person holding a sign

This class action lawsuit claims that the State of Michigan’s Unemployment Insurance Agency administers unemployment insurance through automated programs with were defectively designed, implement, and/or maintained which has deprived thousands of Michigan’s unemployment claimants from their health care.

            In many cases, the programs regularly determined that eligible beneficiaries committed unemployment fraud without any factual basis.  The programs subjected previous beneficiary payments to renewed automated scrutiny and “robo-adjudication” of new fraud determinations for past benefits paid. Under the robo-adjudication system, if any discrepancy is found between the information reported by a claimant and their former employer, the system flags the claimant‘s file as fraudulent. Under the program‘s automated processes, once this occurs there is often no meaningful way for a claimant to respond to the Agency‘s allegation of fraud.  This system has resulted in countless unemployment insurance claimants being accused of fraud even though they did nothing wrong. This finding automatically results in a penalty equal to five times the benefits received (the maximum allowed under the state statute). These punitive assessments regularly total $10,000-$50,000 and sometimes more.

            Many of the practices of the State of Michigan’s Unemployment Insurance Agency were wrongful.  These practices include, but are not limited to:

Sending ―fraud questionnaires‖ containing self-incriminating questions, without any explanation of the factual basis for the Agency‘s fraud allegations or any sufficient information that would provide claimants with a meaningful opportunity to respond;
Automatically assessing the maximum penalty allowed by statute—five times overpayment—without any factual basis to determine intent, all done by computerized robo-determination;
Robo-determinations of fraud based solely on the claimant‘s silence in not returning the fraud questionnaire;
Unauthorized and warrantless seizures of tax returns and wage garnishment without any evidentiary basis or factual finding that would permit the conclusion that that fraud has occurred, depriving claimants of their property without due process of law.

            Three plaintiffs in this lawsuit, Patti Jo Cahoo, Kristen Mendyk, and Khadija Cole, are all residents of Michigan and have filed for and received unemployment benefits.  Later, they were each accused of making fraudulent claims.  Cole, in particular, received a statement indicating that she had made a fraudulent claim and owed approximately $29,000.

            Based on the facts of the case, the plaintiffs in this lawsuit allege the following violations:

  • Negligent Design & Products Liability
  • Violation of the 4th and 14th Amendments
  • Violations of the Michigan State Constitution
  • Violation of the False Claims Act
Article Type: 

Free Case Evaluation

Fill out the information for a FREE and prompt case evaluation.

About you

Additional Information

Latest Tweets

Join Us on Facebook